Industrial Relations Commission New South Wales

• Medium Neutral Citation: Request By Unions NSW and Newcastle Trades Hall Council for assistance of the Industrial Relations Commission of New South Wales re Newcastle Coal Infrastructure Group 2AA and 2F Construction Project Joined With NCIG Coal Loader Construction Project Stage 2 - Hatch & Associates Pty Ltd and Unions NSW and affiliates [2013] NSWIRComm 94
• Hearing dates: 21 October 2013
• Decision date: 08 November 2013
• Jurisdiction: Industrial Relations Commission
• Before: Harrison DP

Decision

Project completed

• Catchwords: Major coal infrastructure project. $2.5 billion Project completed six months ahead of schedule. $200 million under budget. No lost time due to industrial dispute. Exemplary safety record. Co-operative and active implementation of industrial agreement with assistance of the Commission. Positive engagement by Unions, employees and management in safety and productivity issues.
• Legislation Cited: Industrial Relation Act 1996
• Category: Principal judgment
• Parties: Unions NSW; Newcastle Trades Hall Council; Aurecon Hatch; Hatch & Associates Pty Ltd; AiGroup
• Representation: Mr P McPherson, Unions NSW and Newcastle Trades Hall Council; Mr S Kelleher, AiGroup
• File Number(s): IRC 1466 of 2010; IRC 572 of 2010

DECISION

1 These proceedings arise from a request on behalf of Project participants by Unions New South Wales and Newcastle Trades Hall Council for the assistance of the Commission in respect to the Newcastle Coal Infrastructure Group (NCIG) 2AA and 2F construction Project ("the Project").

2 Final Conference proceedings took place on 21 October 2013

3 Those in attendance were:

Mr P McPherson, Unions NSW and Newcastle Trades Hall Council

Mr S Kelleher, AiGroup

Mr W Dawson, Construction Manager Aurecon Hatch

4 The Project is now complete and has been handed over to the client.

5 The overall cost of the Project was $2.5 billion to construct a 66 million tonne per annum export coal loader in the Port of Newcastle.

6 The Project was completed six months ahead of schedule and some $200 million under budget.

7 All stages were ahead of schedule:

Stage 1 - 3 months ahead of schedule

Stage 2AA - 4 months ahead of schedule

Stage 2F - 6 months ahead of schedule

8 The early completion of each stage and the Project overall has allowed export of in excess of 33 million tonnes of coal, earning substantial revenue for all coal chain participants which would not otherwise have been possible.

9 The achievements of the Project have been recognised by a number of industry awards:

Silver Award 2012 in Safety from Australian Bulk Handling Review

Project of the Year Award PACE Zenith Awards 2012

Gold Award for Excellence in Project Management 2011

Gold Medal Australia's Best Building Construction and Mining Magazine 2011

WorkCover NSW Leadership in Safety Award 2010

Bulk Handling Facility of the Year 2010 from Australian Bulk Handling Review

Award for Excellence in Technology Chartered Institute of Logistics and Transport Australia 2010

Finalist International Bulk Journal Awards 2010

Highly Commended Engineering Australia Award 2010

2010 Hatch Global Award for Project Excellence

PFI Awards 2010 - Best Asia Pacific Infrastructure Deal

FinanceAsia 2008 - Best Asia Pacific Infrastructure Deal

PFI Awards 2008 - Best Asia Pacific Infrastructure Deal

CFO Magazine Awards 2008 and 2011 - Best Project Finance Deal

Infrastructure Partnerships Australia 2011 - Project of the Year

10 The commercial and operational achievements are of significance to the region, the state and the nation.

11 These achievements were founded upon a strong communications and consultation framework detailed in the industrial agreements applied in a diligent and responsible manner by all parties.

12 Negotiation of the first Greenfield agreement commenced in July 2007. Mr Peter McPherson of Unions NSW led the negotiations for the unions; Mr Stuart Gordon, then of AiGroup, led the negotiations for the employers. The parties reached agreement on 21 December 2007.

13 A site inspection conducted by the Commission as presently constituted during the course of the negotiations reviewed an area of reclaimed wasteland which was environmentally and geophysically challenging. No work had yet commenced.

14 The Project commenced in 2008, noted in a Statement by the Commission as presently constituted in Matter No IRC 1760 of 2008 (12 May 2009) dealing with Stage 1 of the Project, in which I said:

1 The Newcastle Coal Infrastructure Group (NCIG) comprises BHP Billiton - through Hunter Valley Energy Coal; Centennial Coal; Donaldson Coal; Peabody Energy; Felix Resources; and Whitehaven Coal, in joint venture to construct a coal export terminal on Kooragang Island in Newcastle Harbour.

2 Hatch Associates Pty Ltd ("Hatch") are managing construction works and have made an industrial agreement with Unions NSW, Newcastle Trades Hall Council and others to cover work on the site.

3 The parties, while not in dispute, rely upon the broader definition of that term (which includes a question, difficulty or situation that is likely to give rise to an industrial dispute if preventative action is not taken) to seek the assistance of the Commission in facilitation of the communication process prescribed by their industrial agreement.

4 In furtherance of assisting communication, safety and productivity on the Project a conference and site inspection took place on 29 October 2008 (see Statement of 31 October 2008).

5 The parties sought a further site inspection and conference proceedings, which took place on 6 May 2009.

6 The communications process set out in the Hatch Associates Pty Ltd NCIG CET Project Greenfield Agreement 2008-2010 ("the Agreement") continues to be the foundation of communication, consultation and co-operation between the parties, as detailed in the Statement issued by the Commission as presently constituted on 31 October 2008.

7 Some 55 industrial agreements have now been made in respect to the Project, covering a range of contractors and sub-contractors; 50 of which make use of the provisions of s 146B of the Industrial Relations Act 1996 to nominate the Industrial Relations Commission of New South Wales as the dispute resolution provider. All of those agreements have included the principles of productive working relationships founded on mutual respect and communication.

15 The parties entered into a further industrial agreement for Stages 2AA and 2F which contained the principles of communication, consultation and co-operation.

16 The Hatch Associates Pty Ltd NCIG CET Stages 2AA and F Project Union Greenfield Agreement 2010-2014 ("the Agreement ") was approved by Fair Work Australia as it then was on 12 August 2010 (AG2012/2126) PR 500521.

17 The parties to the Agreement are set out in Clause 2 in the following terms:

2. PARTIES TO THE AGREEMENT

Australian Industry Group, Unions NSW, Newcastle Trades Hall Council have assisted in the negotiation of the terms of this Agreement. The parties bound by this Agreement are:

(a) Hatch Associates Pty Ltd;

(b) All Employees of Hatch Associates Pty Ltd engaged on the NCIG CET Stages 2AA and 2F Project whether members of the organisations listed in (c) or not; and

(c) The organisations that represent the employees defined in (b), namely:

(i) Australian Workers' Union -Newcastle and Northern Regions Branch;

(ii) Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union - NSW Branch;

(iii) Construction, Forestry, Mining and Energy Union - Construction and General Division, NSW Divisional Branch;

(iv) Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union -Electrical, Energy and Services Division, NSW Divisional Branch;

(v) Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union -Plumbing Division, NSW Divisional Branch; and

(vi) Transport Workers' Union of Australia -NSW Branch.

18 An introductory note to the Agreement states:

"This Greenfield Agreement was negotiated by the NCIG CET Stages 2AA and 2F Project Manager, Australian Industry Group and Unions NSW, Newcastle Trades Hall Council and the relevant unions with coverage of the construction work within the scope and application of the Agreement. The Agreement was negotiated for the purpose of providing contractors, at the pre-tender stage, with a project specific model of a Greenfield agreement they could use on the project if they choose to. Use of the model agreement is at the contractor's discretion."

19 In the order of 100 contractors and sub contractors have chosen to make an agreement in similar terms adopting the principles of communication detailed therein.

20 The Agreement sets rates of pay, conditions of employment, hours of work and provides for individual flexibility arrangements in the usual manner.

21 The Agreement details:

• Employer Leadership Responsibilities Clause 9a
• Employee Responsibilities Clause 9b
• Commitment to Continuous Improvement Clause 10
• Project Code of Conduct, Work Rules & Fair Work
• System Clause 11
• Dispute Resolution Clause 30
• Project Communication and Consultation Clause 33

22 Site Safety related matters are dealt with compatibly by mutual delegation in Clause 12 and in detail in Appendix 1 to the Agreement.

23 Clause 30 Dispute Settlement Procedures nominates the NSW Industrial Relations Commission as the dispute resolution provider for the parties to the Agreement.

24 A standing arrangement for quick response existed between the parties and the Commission that either Deputy President Harrison or Commissioner Stanton would be available to list proceedings instantly if matters arose in a monthly meeting which required assistance.

25 This facility was not utilised as the parties were able to deal with matters in the consultation process.

26 Clause 33 specifies the consultation mechanism to be applied on the project. Clause 33 states:

33. Project Communication and Consultation

(a) As a means to assist with ensuring effective and efficient consultation and communication processes to deal with Project issues and updates and to discuss issues affecting Employees, communication meetings with Employees will be held on a monthly basis unless otherwise agreed.

(i) Appointed Employee representatives shall be entitled to meet with the Union party representatives prior to any meetings of Employees conducted under this clause without deduction of pay for up to one hour for each meeting.

(ii) Subject to (e) of this clause, Project Management will convene a meeting of Employees each month to discuss Employee matters specific to the Project and the operation of the Agreement. The meeting shall be from 9.00am to 10.00am or as otherwise agreed.

(iii) Following this meeting Employee representatives will meet with Project Management to clarify issues that may have arisen.

(iv) Excepting the time provided for in subclause(a), (b) and (c) of this clause and subclause 33(a), any time lost during working hours due to attendance at meetings of Employees shall not be paid.

(v) The right for Employees to participate in the meeting referred to in this clause may be withdrawn by Project Management at any time should Employees attend meetings outside the times and dates provided for in this clause.

(b) Where the Employer proposes to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on employees in the relevant branch/site, the Employer will as soon as reasonably practicable consult, in a meaningful way, with the employees affected by the proposed changes and their union(s) prior to a final determination on any such change.

(i) "Significant effects" include termination of employment; major changes in the composition, operation or size of the employer's workforce or in his skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this Agreement makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(ii) "Meaningful Consultation" includes providing affected employees and the relevant Union(s) with a bona fide opportunity to discuss the Employer's decision(s). In order to facilitate meaningful consultation, the Employer will provide relevant information including:

• the reasons for the proposed change,
• the number and category of employees likely to be affected; and
• the period over which any change may be intended.

(iii) It is the intent of the Parties to utilise the Communication Process outlined above to give effect to this consultation provision.

27 In accordance with these obligations there have been 62 consecutive monthly communication meetings and 13 site inspections and reports to the Commission with consequent publication of Statements.

28 In total, Mr McPherson, on behalf of Unions NSW and Newcastle Trades Hall Council, participated in 99 face to face meetings with contractors, subcontractors and their employees; as well as countless day to day communications by telephone, text and email.

29 The first of the site consultative meetings took place on 13 August 2008.

30 During the course of the Project Mr McPherson maintained his representation of the Peak Councils, Unions NSW and the Newcastle Trades Hall Council (NTHC); Mr T Callinan, Mr R Downie and Ms K Thomsom represented The Australian Workers' Union, New South Wales (AWU). Mr Garry Kennedy represented the NTHC; Mr J Page represented The Electrical Trades Union of Australia, NSW Branch (ETU); Mr P Harris represented the Construction, Forestry, Mining and Energy Union (NSW Branch) (CFMEU); Mr D Wallace represented the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (AMWU); and Mr S McCarney represented the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union -Plumbing Division, NSW Divisional Branch (CEPU).

31 The site inspections and reports to the Commission were well attended by management, union officials and delegates.

32 Mr Wayne Dawson held the role of Construction Manager throughout the entire period of the Project. Mr Stuart Gordon, assisted by Ms Emma Morson, appeared for AiGroup in the proceedings in the early stages of the Project. Ms Morson was the AiGroup representative on behalf of the contractors for the substantial period of the Project, supported by Mr Kelleher and Ms Davies in the latter stages.

33 A total of 104 representatives participated in the formal site inspections and report proceedings conducted by the Commission.

34 The Project is an exemplary model of what can be achieved by the active and co-operative application of a sound industrial agreement. As noted by Mr Callinan of the AWU in the course of a site conference, some contractors have taken their positive experiences from this Project to other work in the region.

35 All participants are deserving of recognition and respect for their contribution.

36 Only one safety issue involved recourse to the Commission dealt with by Commissioner Stanton swiftly in formal proceedings; and one matter of entitlement dealt with by the Commission as presently constituted and resolved by the parties in private conference.

37 Matters No IRC 572 and 1466 of 2010 are so concluded.

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Decision last updated: 08 November 2013